Renewable energy shift ‘is about to accelerate’ making Vulcan (ASX:VUL) shares a buy: Broker

Vulcan shares could be in the buy zone….

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Key points

  • Vulcan shares are down 17% in 2022.
  • German research firm Alster Research believes this could be a buying opportunity.
  • It believes the shift to renewable energies is about to accelerate

The Vulcan Energy Resources Ltd (ASX: VUL) share price is having a tough time in 2022.

Since the start of the year, the lithium developer’s shares are down 17%.

Is the Vulcan share price weakness a buying opportunity?

One broker believes the Vulcan share price could be dirt cheap following its recent weakness.

According to a note out of Germany-based Alster Research, its analysts have a buy rating and $20.00 price target on the company’s shares.

Based on the current Vulcan share price of $8.95, this implies potential upside of over 120% for investors over the next 12 months.

What did the broker say?

Alster has noted that “crude oil and natural gas have seen steep price increases” in recent weeks.

Its analysts believe that these sky high energy prices are likely to be a boost to the transition to renewable energies, which bodes well for Vulcan and its massive Zero Carbon Project in Germany.

It commented: “Much likely, the push into renewable energies is about to accelerate as energy policy is reevaluated. Going in the same direction, the Fraunhofer Institute sees geothermal energy as a viable substitute for fossil energy sources and recommends action by policymakers and industry for an accelerated penetration. Overall, we expect the conditions for Vulcan to receive a further impetus not only due to the conflict, but also due to the fulfillment of climate targets. We confirm our PT with AUD 20.00, equivalent to EUR 13.22. We reiterate to BUY.”

All in all, the broker remains “confident about Vulcan’s operational development and improvement in becoming a provider of renewable energy and lithium with a zero-carbon footprint” and appears to see it as a great option for investors seeking exposure to the white metal and decarbonisation theme.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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